6 ms·

The money laundering control systems, as well as being ineffective at controlling crime can be a pain in the neck for the law abiding. I have money from my gran

by tim333 1y ago

The money laundering control systems, as well as being ineffective at controlling crime can be a pain in the neck for the law abiding. I have money from my grandad, received 40 years ago. No one really has records going back that far but you try buying a house and they want proof of the origin of the funds. Trying going to your bank to get records from five years ago often gives a date out of range error.

bob1029 1y ago
One fun way to get around this is to have enough money to sidestep the bank altogether. The title company does not give a shit about where the money came from. All they will want to see is a screenshot of your current balance so they know you aren't wasting everyone's time.
- pkaodev 1y ago
  "just be rich bro"
- mothballed 1y ago
  I bought a cheap property (vacant land with no utilities) then built the house literally $20 or $1000 at a time buying blocks/wood/pipes etc as I was building. All the money was legally earned and taxed, but the point is even the title company was sidestepped in this case beyond an amount pretty trivial in comparison to the value of the property and very little of it would have had to of went through the traditional financial system in order to make it possible.
gruez 1y ago
>The money laundering control systems, as well as being ineffective at controlling crime The point of AML/KYC regulations isn't to stop all crime, just like the point of US sanctions on Russia isn't to stop all Russian exports. In both cases it's to raise the cost of doing business for the entity being targeted. In the case of Russia, they can still sell their oil to India or whatever, but at a steep discount. In the case of drug cartels, they can still get their funds into the regular banking system, but also at a steep discount. Smuggling pallets of dollar bills across the border and setting up a network of front companies is expensive. Doing all that also which implicate them in even more crimes, so even if there's no evidence of them smuggling fentanyl, they can be prosecuted purely on the basis of having a car full of cash. >I have money from my grandad, received 40 years ago. No one really has records going back that far but you try buying a house and they want proof of the origin of the funds. The better question is why are you were sitting on cash for 40 years. In that time inflation already ate 66% of the value, and if you factor in the opportunity cost of not investing the money in stocks/bonds, the loss is even greater.
- bluGill 1y ago
  I know a number of people who don't trust banks and so have their cash in a mattris or similer things. Most are dead - they remembered banks failing in the 1930s and said never again.
- bee_rider 1y ago
  I don’t think that really is the better question. It’s their money, if they want to do silly things with it that’s up to them.
  - jacquesm 1y ago
    Yes, but they are now aiming to use these funds to buy real estate and of course that is going to raise a bunch of flags. If the government would accept this without challenge criminals would suddenly be left all kinds of crazy inheritances. At a minimum you'd expect some documentation of how that money landed in their possession in the first place, for instance a will, a final balance of an estate and so on. I've handled a couple of these for family members and the amount of paperwork around even a minor inheritance can be pretty impressive.
    - mothballed 1y ago
      I'd expect a presumption of innocence, and at the very least I'd expect some documentation from the government showing probable cause of a specific crime the money was involved in before blocking the transaction. The presumptive innocent party shouldn't have to provide anything by default.
      - jacquesm 1y ago
        You have a presumption of innocence up to a certain amount. After that there is a - minor - burden of proof. Not a single time that this happened to me did any of this appear to me to be unduly burdensome or invasive, and whoever did the investigation went out of their way to state that they did these checks as a formality, not because I was suspected to be in any way out of line. I don't recall it ever taking more than a few minutes (if that) either. If I showed up with 50K in cash at the tellers window or a local notary to pay in part for a house tomorrow morning though I would expect the conversation would be an entirely different one.
spydum 1y ago
They have them, but not from a web interface. Probably will require talking to a human, and a service fee to retrieve the records from physical storage.
gnopgnip 1y ago
The lender only needs you to show proof of the origin of funds if they were transferred in the last 60 days
- jacquesm 1y ago
  Depends on the jurisdiction and it may not be the lender that requires proof of origin but the party handling the transaction. They may even have a reporting requirement for 'suspicious transactions'.
cortesoft 1y ago
That requirement isn’t about money laundering at all. They are wanting to make sure that you aren’t borrowing the down payment from someone else, because that would mean you don’t actually have as much (or any) of your own money invested in the property. The point of a down payment is to make it so the borrower has an incentive to not default on the loan, because the borrower would lose the down payment. If the down payment is actually borrowed money as well (like suppose you get a credit card advance for the money), then the borrower won’t lose anything if they stop paying the loan, and there is increased risk that the loan defaults.
jerf 1y ago
You shouldn't really need to prove where you got them from; what the system cares about is that you're not laundering it, and it's obvious that nobody launders money on a multi-decade timescale. All you should need to satisfy them is just to show that you've been in possession of it for so long the bank can't even show where it came from anymore. That is itself proof that it's not laundering. You may have good success just pushing back a bit with this point.
FireBeyond 1y ago
> but you try buying a house and they want proof of the origin of the funds Fannie Mae's assessment criteria for origin of funds has a time limitation. If that money has been in an account you control, for forty years, "origin of funds" is not a question. I want to say the cut off is something like 36 months, but it may be even less. Helpfully, all this information is public: https://selling-guide.fanniemae.com/sel/b3-4.3/verification-non-depository-assets https://selling-guide.fanniemae.com/sel/b3-4.3/verification-...
- tim333 1y ago
  I'm in the UK. You can kind of get around the regulations but they are still a pain.
stouset 1y ago
> I have money from my grandad, received 40 years ago. No one really has records going back that far but you try buying a house and they want proof of the origin of the funds. This makes zero sense. I have bought a house, and they want bank records going back like a few months or maybe a year at most. If that money has been sitting in an account for that long, nobody gives a shit where it originally came from. Like, if you had $100,000 for a down payment, they’re not checking the last twenty years of your paystubs to make sure the math checks out. The only thing they really are interested in is knowing this money didn’t just appear out of nowhere because you got a personal loan from someone or because you got a conventional loan from a lender that hasn’t reported it to a credit reporting agency yet, and which would affect the decision to underwrite your loan. If you’ve just been holding on to large sums of literal cash dollar bills for the last 40 years, that is such a comically ridiculous financial decision I don’t even know what to tell you.
- moduspol 1y ago
  > I have bought a house, and they want bank records going back like a few months or maybe a year at most. I had to juggle with this a little bit because I had sold some crypto for the down payment, but it's crypto that I had been keeping in a hardware wallet for years. As a result, I could certainly generate records showing how long I'd had it, but they'd be my own records based on the blockchain--not from any bank. They ended up accepting transaction records from Coinbase, though even those mostly just showed some Bitcoin being received into the account and then being sold before transferred to the bank. But I guess that was enough for them. In any case: I did ask about it and they told me it wasn't actually for KYC laws or money laundering. The reason they want a paper trail is to make sure you didn't actually just borrow the money from someone else. And that makes sense, since they're super picky about you not opening any new lines of credit while trying to close the mortgage.
jcz_nz 1y ago
Your problem isn't AML, it's chain of title. Different things. And yes, you have to show they aren't stolen. Get an indemnity bond if possible.
alexey-salmin 1y ago
Wait until the wise people explain to you that generational wealth is inherently evil and this money should be forfeited anyway.

by tim333 1y ago

bob1029 1y ago

One fun way to get around this is to have enough money to sidestep the bank altogether. The title company does not give a shit about where the money came from. All they will want to see is a screenshot of your current balance so they know you aren't wasting everyone's time.

pkaodev 1y ago
"just be rich bro"
mothballed 1y ago
I bought a cheap property (vacant land with no utilities) then built the house literally $20 or $1000 at a time buying blocks/wood/pipes etc as I was building. All the money was legally earned and taxed, but the point is even the title company was sidestepped in this case beyond an amount pretty trivial in comparison to the value of the property and very little of it would have had to of went through the traditional financial system in order to make it possible.

gruez 1y ago

>The money laundering control systems, as well as being ineffective at controlling crime The point of AML/KYC regulations isn't to stop all crime, just like the point of US sanctions on Russia isn't to stop all Russian exports. In both cases it's to raise the cost of doing business for the entity being targeted. In the case of Russia, they can still sell their oil to India or whatever, but at a steep discount. In the case of drug cartels, they can still get their funds into the regular banking system, but also at a steep discount. Smuggling pallets of dollar bills across the border and setting up a network of front companies is expensive. Doing all that also which implicate them in even more crimes, so even if there's no evidence of them smuggling fentanyl, they can be prosecuted purely on the basis of having a car full of cash. >I have money from my grandad, received 40 years ago. No one really has records going back that far but you try buying a house and they want proof of the origin of the funds. The better question is why are you were sitting on cash for 40 years. In that time inflation already ate 66% of the value, and if you factor in the opportunity cost of not investing the money in stocks/bonds, the loss is even greater.

bluGill 1y ago
I know a number of people who don't trust banks and so have their cash in a mattris or similer things. Most are dead - they remembered banks failing in the 1930s and said never again.
bee_rider 1y ago
I don’t think that really is the better question. It’s their money, if they want to do silly things with it that’s up to them.
- jacquesm 1y ago
  Yes, but they are now aiming to use these funds to buy real estate and of course that is going to raise a bunch of flags. If the government would accept this without challenge criminals would suddenly be left all kinds of crazy inheritances. At a minimum you'd expect some documentation of how that money landed in their possession in the first place, for instance a will, a final balance of an estate and so on. I've handled a couple of these for family members and the amount of paperwork around even a minor inheritance can be pretty impressive.
  - mothballed 1y ago
    I'd expect a presumption of innocence, and at the very least I'd expect some documentation from the government showing probable cause of a specific crime the money was involved in before blocking the transaction. The presumptive innocent party shouldn't have to provide anything by default.
    - jacquesm 1y ago
      You have a presumption of innocence up to a certain amount. After that there is a - minor - burden of proof. Not a single time that this happened to me did any of this appear to me to be unduly burdensome or invasive, and whoever did the investigation went out of their way to state that they did these checks as a formality, not because I was suspected to be in any way out of line. I don't recall it ever taking more than a few minutes (if that) either. If I showed up with 50K in cash at the tellers window or a local notary to pay in part for a house tomorrow morning though I would expect the conversation would be an entirely different one.

spydum 1y ago

They have them, but not from a web interface. Probably will require talking to a human, and a service fee to retrieve the records from physical storage.

gnopgnip 1y ago

The lender only needs you to show proof of the origin of funds if they were transferred in the last 60 days

jacquesm 1y ago
Depends on the jurisdiction and it may not be the lender that requires proof of origin but the party handling the transaction. They may even have a reporting requirement for 'suspicious transactions'.

cortesoft 1y ago

That requirement isn’t about money laundering at all. They are wanting to make sure that you aren’t borrowing the down payment from someone else, because that would mean you don’t actually have as much (or any) of your own money invested in the property. The point of a down payment is to make it so the borrower has an incentive to not default on the loan, because the borrower would lose the down payment. If the down payment is actually borrowed money as well (like suppose you get a credit card advance for the money), then the borrower won’t lose anything if they stop paying the loan, and there is increased risk that the loan defaults.

jerf 1y ago

You shouldn't really need to prove where you got them from; what the system cares about is that you're not laundering it, and it's obvious that nobody launders money on a multi-decade timescale. All you should need to satisfy them is just to show that you've been in possession of it for so long the bank can't even show where it came from anymore. That is itself proof that it's not laundering. You may have good success just pushing back a bit with this point.

FireBeyond 1y ago

> but you try buying a house and they want proof of the origin of the funds Fannie Mae's assessment criteria for origin of funds has a time limitation. If that money has been in an account you control, for forty years, "origin of funds" is not a question. I want to say the cut off is something like 36 months, but it may be even less. Helpfully, all this information is public: https://selling-guide.fanniemae.com/sel/b3-4.3/verification-non-depository-assets https://selling-guide.fanniemae.com/sel/b3-4.3/verification-...

tim333 1y ago
I'm in the UK. You can kind of get around the regulations but they are still a pain.

stouset 1y ago

> I have money from my grandad, received 40 years ago. No one really has records going back that far but you try buying a house and they want proof of the origin of the funds. This makes zero sense. I have bought a house, and they want bank records going back like a few months or maybe a year at most. If that money has been sitting in an account for that long, nobody gives a shit where it originally came from. Like, if you had $100,000 for a down payment, they’re not checking the last twenty years of your paystubs to make sure the math checks out. The only thing they really are interested in is knowing this money didn’t just appear out of nowhere because you got a personal loan from someone or because you got a conventional loan from a lender that hasn’t reported it to a credit reporting agency yet, and which would affect the decision to underwrite your loan. If you’ve just been holding on to large sums of literal cash dollar bills for the last 40 years, that is such a comically ridiculous financial decision I don’t even know what to tell you.

moduspol 1y ago
> I have bought a house, and they want bank records going back like a few months or maybe a year at most. I had to juggle with this a little bit because I had sold some crypto for the down payment, but it's crypto that I had been keeping in a hardware wallet for years. As a result, I could certainly generate records showing how long I'd had it, but they'd be my own records based on the blockchain--not from any bank. They ended up accepting transaction records from Coinbase, though even those mostly just showed some Bitcoin being received into the account and then being sold before transferred to the bank. But I guess that was enough for them. In any case: I did ask about it and they told me it wasn't actually for KYC laws or money laundering. The reason they want a paper trail is to make sure you didn't actually just borrow the money from someone else. And that makes sense, since they're super picky about you not opening any new lines of credit while trying to close the mortgage.

jcz_nz 1y ago

Your problem isn't AML, it's chain of title. Different things. And yes, you have to show they aren't stolen. Get an indemnity bond if possible.

alexey-salmin 1y ago

Wait until the wise people explain to you that generational wealth is inherently evil and this money should be forfeited anyway.